Ever since the idea of establishing a single currency for the Economic Community of West African States (ECOWAS) was first launched in Conakry Guinea in 1983 after ECOWAS was founded in 1975 to bring together brothers of the Portuguese-speaking countries, French-speaking countries, and English Speaking countries together. There have been varied submitted intellectual works to argue for and against the success of a single currency union proposal, which hasn’t find the daylight yet. With estimated evidence of 58% of quality papers on this subject matter from independent scholars based in Europe and the USA, 30% of the independent scholars from the francophone countries within the ECOWAS region, 10% among the Anglophone countries within the ECOWAS region led by Nigerian authors and the remaining 2% from the Asian Universities led by China. When the single currency union was lunched, a monetary cooperation program was proposed, which was subsequently validated in July 1987 according to the account of (Amato & Nubukpo, 2020). In other to implement the idea of a single currency at the level of the entire ECOWAS, the new West Africa Monetary Agency (WAMA) was formed in 1996 to replace the Monetary Cooperation Program (MCP) tasked to accomplish the following;
[I] In the short term phase the agency was charged to strengthen the currency payment mechanism of the West Africa clearing house by removing outstanding payment arrears.
[II] Introduction of new payment instrument such as travelers’ cheque
[III] The introduction of credit guarantees funds to support the clearing mechanism and remove all non-tariffs barriers that limit the use of national currencies for payments for certain transactions, such as hotel bills, airline tickets, etc.
[IV] In the medium term, the agency was to oversee the limited conversion of national currencies, which must be eliminated to avoid restrictions in inter-currency exchange
[V] In the long term, it was the agency’s focus to create a single ECOWAS currency monetary area that modifies the use of a single convertible currency.
The Political commitment to renewed cooperation was carried out by Ghana and Nigeria after December 1999 and subsequently accepted by Guinea, the Gambia, Sierra Leone, and Liberia constituting a new league of Anglophone countries to transform the idea of an acceleration approach towards monetary integration into actualize actions in a realistic and achievable proposal and collaborate with the francophone counterpart to create a successful monetary union with a single currency agenda. The crystallization of this idea led to the formation of the West Africa Monetary Zone (WFMZ) on April 20, 2000, in Accra, Ghana. In the 2nd Summit of the African Conference of Heads of State and Government on the 15th December 2000; the statute of the future Central Bank of the West Africa Monetary Zone was drafted. The next effort was to be pooling of foreign reserves, as well as negotiate the convertibility of the foreign currency guarantee with an appropriate international agency. Which required member States to implement economic reform programs to achieve macroeconomic convergence including political reform agenda.
On the 21st December 2019, this union defined their latest step of execution, which conclude, the credibility of the monetary integration of the ECOWAS made up of 16 countries in a whole, which are Sierra Leone, Ivory Coast, Nigeria, Benin, Ghana, Guinea-Conakry, Gambia, Burkina Faso, Mauritania, Niger, Liberia, Togo, Cape Verde, Senegal, Guinea-Bissau, Mali, Togo. With the definition of their current step of execution, did establish that the credibility of the monetary integration of the ECOWAS area will be based not only on monetary stability but also on the implementation of a mechanism to support a strong, inclusive, and development centered growth.
Which had monetary integration as the integral component of the ECOWAS vision 2020. The aim of this vision is the intensification of the integration process through the promotion of the West African identity and community within the populations of the continent of Africa and the world as a whole. Therefore, the regional strategic plan of the ECOWAS was to see the intensification of economic and monetary integration as an important pillar for the development of the community. Meanwhile (Saxegaard, 2006: Buchs & Mathisen, 2005: Senzu, 2019), they were very pessimistic and argued that the success of single currency of ECOWAS for vision 2020 was likely impossible because the community is having many monetary problems, in particular, the immediate non-convertibility between their currencies and poorly developed financial systems and payment channels as well as ineffective monetary policies transmission channels. To crown, it all was an observation of strong imbalances between the exchange rates of different currencies in play within the region including high national debt to GDP effect. Nevertheless, the single currency union was not a mission impossible beyond ECOWAS vision 2020.
This article is an extract of a coming-up paper titled, “The advanced proposed architecture of Eco-currency; technical analysis of West Africa Single currency program.” To be published in September 2020. Authored by Emmanuel Tweneboah Senzu, professor of Economics & Investment Banking, Njala University Sierra Leone. And a faculty member to the technical division of Sierra Leone Central Bank. President of Frederic Bastiat Institute Africa. E-mail address: Tsenzu706@gmail.com